10-03-2022 Council Work Session Packet

Home Search

WS – 1 WORK SESSION STAFF REPORT Work Session Item No. 1 Date: October 3, 2022 To: City Council From: Michael Grochala, Community Development Director Re: Clearwater Creek Buisiness Park (Ryan), TIF Plan for District 1-14 Background The City Council reviewed a draft Tax Increment Financing plan at the September 6, 2022 City Council work session. As previously discussed Ryan Companies, US, Inc., recently entered into a purchase agreement to acquire 33 acres north of Clearwater Creek, west of I-35E. Ryan is proposing construction of 3 buildings totaling approximately 451,000 square feet of manufacturing, office and warehouse space with an estimated market value of $31,000,000. Ryan Companies has submitted a request for Tax Increment Financing (TIF) to assist with what they consider extraordinary costs associated with the site development. TIF is a tool that uses the incremental increase in taxes generated by the development to defray the costs of eligible expenditures. These include soil corrections, site fill, public utility relocations, transmission line relocation and the street improvements. Ryan Companies application identified a financial gap of $5.9 million (excluding the transmission line relocation related to an adjacent site). Staff has worked with Baker Tilly to complete an analysis of the request and development pro forma. Based on this review staff is recommending establishment of the TIF District. The Ryan Development is estimated to generate $3444,854 in increment over the full 9 year term of a district. The City would expect to retain 5% ($172,240) for administrative expenses and pooling purposes, leaving approximately $3.27 million available for project use. Staff has reviewed the extraordinary costs identified by Ryan Co.’s, along with their financial projections for development of their site and extension of 21st Avenue. Based on this review we are supportive of assistance in the amount of $2,900,000 as shown in the following table: